Nasdaq Bears Tighten Grip as Downtrend Persists

Market Overview:

The Nasdaq Composite Index continues to experience significant downward pressure, extending its sharp decline from the 20,980 level down to a recent low of 17,350. The index is currently navigating a volatile phase, marked by a severe 3.4% drop earlier in the week. This decline has been primarily driven by economic concerns and widespread selling in the technology sector, particularly impacting semiconductor companies like Nvidia. Heightened geopolitical tensions and disappointing economic data have further exacerbated the bearish sentiment.

Technical Analysis:

The Nasdaq Composite Index has been trading below its 34-period moving average, and the recent break below the support level at 17,941.90 has intensified the downward trend. The bears have managed to push the price below the critical support at 17,801.45, and as the selling pressure mounts, the next immediate targets are the support levels at 17,590.27 and 17,425.55. If the bearish momentum persists, the index could eventually test the 17,073.92 level, which could be a significant area of interest for market participants.

Alternative Scenario:

Conversely, should the index find strong buying support and reclaim the 17,941.90 level, the immediate focus would shift to overcoming the resistance at 18,139.15. However, for the bulls to regain control and reverse the current downtrend, a sustained break above the 18,458.25 level is essential. Such a move would signal a potential shift in market sentiment and open the door for a recovery.

Oscillators Confirmation:

In the 4-hour chart, the oscillators are clearly aligned with the bearish momentum. The RSI is descending, indicating increasing selling pressure and no signs of reaching oversold territory, suggesting room for further declines. Similarly, the MACD is deeply negative, with the histogram widening below the signal line, reinforcing the ongoing downtrend. These indicators collectively confirm that the sellers maintain control of the market, and the bearish momentum remains intact.

Key Levels:

Resistance Levels:

• Resistance 3: 18,458.25
• Resistance 2: 18,139.15
• Resistance 1: 17,941.90

Current Price (at the time of analysis): 17,813.35

Support Levels:

• Support 1: 17,801.45
• Support 2: 17,590.27
• Support 3: 17,425.55
• Support 4: 17,073.92

Fundamental Factors and Market Sentiment:

The ongoing decline in the Nasdaq Composite is underscored by broader economic concerns, including fears of an impending recession and a general sell-off in technology stocks. This bearish trend is compounded by the release of underwhelming economic data and escalating geopolitical risks, which have particularly impacted tech and semiconductor stocks.

Market participants are closely monitoring the U.S. weekly jobless claims report, which could provide fresh insights into the labor market’s health amidst these concerns of economic slowdown. Additionally, with 1,239 companies scheduled to release their quarterly earnings reports today, the index could see further volatility. While positive earnings from key sectors could offer some relief, the overall market sentiment remains cautious.

Conclusion:

The Nasdaq Composite Index remains under heavy selling pressure, with the technical and fundamental indicators pointing to a continuation of the downtrend. Unless key support levels hold or there is a significant shift in economic data or earnings reports, the index appears poised for further declines. Traders and investors should remain vigilant, as any major economic reports or earnings surprises could lead to abrupt market shifts.

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